The frozen cheesecake business has been good to Culinary Arts Specialties.
So good that the Cheektowaga company needs to expand its production capacity and is deciding where to do that.
The Keller family members who run the business want it to be clear that Culinary Arts' operation on Union Road and its roughly 100 jobs are staying put. What they are deliberating is where to carry out the expansion, either in Western New York or in some other state.
"We want to grow the business here in Western New York," said Arthur Keller Jr., vice president and director of plant operations. "However, we need a level playing field with our competition. And that's what it really comes down to."
Culinary Arts has received offers of incentives from states like North Carolina, Virginia, Wisconsin and Kansas, as well as Canada. Company leaders recently met with Buffalo-area economic development officials, Empire State Development and the New York Power Authority to talk about the expansion plan.
At the moment, Culinary Arts can produce, pack and ship 35,000 to 40,000 family-size cheesecakes per day. It exports about 80 percent of its output, much of that to Canada.
But the company has reached its maximum production capacity at its Union Road plant, which it moved into in 2006, much faster than anticipated, said Andrew P. Keller, vice president of sales and marketing. The company does not disclose sales figures, but he said its sales have doubled since entering the new plant five years ago.
Meanwhile, Culinary Arts intends to grow even more, through making greater inroads in the U.S. market. While it needs more production space, the company wants to keep costs in check, in order to effectively compete with U.S. rivals. Power costs are a prime issue the Kellers said.
"The competition's fierce in the United States," Arthur Keller Jr. said. "We've got our manufacturing processes down pat. We've got a wonderful staff. We have all the ingredients. Now we just need to compete with some of the states where our competition is.
"We're not looking for corporate welfare," he said. "We're simply looking to level it out."
Culinary Arts envisions a multiphase expansion, the first step of which is estimated at $600,000 to $700,000. That phase would create more freezer and packaging space, and an additional maintenance area.
Subsequent expansion, estimated at several million dollars, would involve new product lines that would require much more space. Even if Culinary Arts opts to carry out that expansion phase locally, the company would have to find a different site around here, since its existing Union Road site does not have enough room to accommodate it.
"Over five to 10 years, we want to double in size, no question about it. I don't think there's any reason we couldn't do that," Arthur Keller Jr. said, referring to the prospects of doubling sales revenues, facility size and probably its number of employees, as well.
Andrew Keller said he would like to see Empire State Development provide a complete presentation of the programs and incentives Culinary Arts could tap into if it expands here, similar to what other states have provided. He said he feels Culinary Arts missed out on some program opportunities when it built the new plant several years ago, and he doesn't want that to happen again.
Beth O'Keefe, business development officer with ECIDA, said the agency has worked with Culinary Arts before, on the plant it built in Cheektowaga. O'Keefe and representatives of Empire State Development and the Power Authority said they have had preliminary talks with Culinary Arts and were awaiting specific requests from the company.
Culinary Arts was started by Andrew and Arthur Jr.'s grandfather and was incorporated in 1982. Its current president and chief executive officer is their father, Arthur Keller Sr.
The company spotted an opportunity for high-quality frozen cheesecakes in the Canadian market years ago and built upon it, establishing a widespread presence among that country's retailers. But the company's name still probably is not familiar to local residents.
"We fly under the radar, intentionally," Andrew Keller said. "We've been very quiet. It's served us well in Canada. We're fairly unknown. We're a private label producer."
Confidentiality agreements prevent them from identifying most of their retail customers, but the Kellers mention Tops and Wegmans stores as a couple of places their products can be found.
The Kellers say they want to get started soon on the expansion and hope to make a decision within a few months.
"This [Cheektowaga plant] isn't going anywhere," Arthur Keller Jr. said. "However, we are going to need more capacity. We have more opportunities than we can shake a stick at it."